On Monday, resident Javier Milei addressed Argentines, asserting that “the worst is over” during a speech that introduced elements of his government’s 2026 Budget bill, simultaneously positioning himself for the upcoming midterm elections. Milei, unveiled intentions to increase expenditures on pensions, healthcare, education, and assistance for the disabled in the upcoming fiscal year as outlined in the bill – a response to the sectors most adversely affected by nearly two years of stringent austerity measures implemented by his administration.
“The worst is over,” Milei asserted during a 17-minute ‘Cadena Nacional’ nationwide broadcast, where he presented the draft budget for 2026. Milei’s address occurred merely eight days subsequent to his party’s significant defeat in the regional elections held in Buenos Aires Province. This time, the collective effort of all Argentines is indeed valuable,” Milei assured voters, while acknowledging: We recognize that many have not yet experienced in their material reality. This budget, akin to the one presented last year, maintains fiscal equilibrium. “Today the future of Argentina depends fundamentally on one thing: that the people and the political class commit to fiscal order,” stated the President. “This is not merely a draft bill; it represents the formal endorsement of our dedication to restoring the nation’s stability,” he added. Notwithstanding this, the head of state forecasted that Argentina’s GDP might expand by as much as five percent annually, potentially increasing to seven or eight percent contingent upon the implementation of his reforms. At such rates, he stated, in a decade Argentina could resemble one of the world’s high-income countries, while in two decades it could be among the wealthiest nations. In 2030, Milei forecasted that Argentina would emerge as one of the leading global powers.
He stated that a failure to balance the nation’s books would result in South America’s second-largest economy “returning to the pit of uncontrolled inflation and the destruction of all hopes for the country.” The government failed to achieve a consensus in Congress regarding the approval of its two prior draft budgets. Since that time, it has simply transitioned to the 2023 iteration. The practice of extending the previous budget annually has conferred upon the head of state considerable latitude in the administration of financial resources. A vigorous discussion is anticipated in Congress for this iteration, as opposing factions are eager to modify the administration’s proposal. Milei’s speech exhibited a distinct electoral resonance. He pledged to provide increases that surpass inflation for health, pensions, disability, and education. He articulated his intention to collaborate “side by side” with governors and lawmakers – contingent upon their agreement to maintain fiscal balance. In the context of announcing relief measures for certain individuals severely impacted by his significant spending reductions, Milei emphasized that achieving a balanced budget – his primary objective since assuming office in December 2023 – was “non-negotiable.” He characterized it as the “cornerstone” of his administration, asserting that his government had achieved “the largest adjustment in the history of humanity.”
“No country in the world can function without a balanced budget, which is why politicians everywhere build consensus to pass the law of laws.” “We understand that fiscal balance might seem like a whim, but it is nothing less than the definitive solution to the problems that have plagued Argentina for decades,” stated Milei. The Budget reflects “the lowest level of national spending relative to GDP in 30 years,” he observed. According to the government, national spending will, for the first time since the 1990s, be lower than provincial spending. The proposed legislation aims to restrict the Treasury from utilizing the Central Bank for self-financing and to establish a fiscal stability rule. This rule mandates reductions in other segments of public expenditure should revenue underperform or expenses exceed anticipated levels, which is also a fundamental aspect of his 2025 Budget proposal. Milei announced real-term spending increases for education, health, and the disabled in terms of allocations. “This Budget allocates 4.8 trillion pesos to national universities, increases pension spending by five percent, and elevates health spending by 17 percent, all exceeding projected inflation.” Expenditure on education experiences an increase of eight percent over the rate of inflation. The adjustment to disability pensions will result in a five percent increase in real terms.
“In summary, if the Budget represents the government’s strategic framework, then 85 percent of it will be designated for education, health, and pensions,” stated the President, aiming to counter some of the most robust criticisms directed at his administration. The leader of La Libertad Avanza is encountering significant political and economic challenges as he prepares for the pivotal midterm elections scheduled for next month. His party experienced a significant setback, enduring a nearly 14-point defeat against the opposition Peronist movement in the elections for the Buenos Aires Province legislature, which is regarded as a crucial indicator of Milei’s popularity. The vote on October 26 will determine the composition of Congress for the subsequent two years of his administration. The Milei administration is entering the midterm elections amidst a shadow of corruption, as allegations surface regarding the President’s sister and chief-of-staff, Karina Milei, purportedly receiving a share of state medicine contracts intended for the disabled. Additional high-ranking officials have also been implicated. The President has categorically dismissed those claims; however, his sister has refrained from making any direct public comments regarding the matter.
In a clear indication of the discontent prevalent among numerous Argentines regarding his policies, both individuals faced stone pelting during their campaign trail in late August, leading to clashes between supporters and adversaries. The President’s reductions in expenditures for the elderly and disabled have notably estranged a significant portion of the Argentine populace, prompting them to organize frequent protests against the administration. A former television commentator, Milei assumed office in December 2023, vowing to implement “shock therapy” for Argentina’s persistently struggling economy, brandishing a chainsaw as a metaphor for his strategy to drastically reduce government expenditures. He has eliminated 53,000 positions in the public sector, imposed a freeze on public works initiatives, significantly reduced expenditures, and spearheaded a substantial deregulation effort. His reforms yielded remarkable outcomes regarding inflation, with annual inflation decreasing from 211 percent at the close of 2023 to a current rate of 33.6 percent. However, this success came at the cost of a significant decline in growth and consumption. Experts are currently cautioning that an excessively overvalued peso is undermining Argentina’s competitive position.
Milei concluded his address with a personal reflection: “It has taken great effort to get here.” “All of us have made sacrifices to emerge from the predicament we faced upon assuming office. We recognize that the path ahead is challenging, yet we are equally aware that it is the correct course of action.” Nonetheless, Milei’s critics remained unconvinced. Several online commentators have pointed out that the President’s assertion that the “worst is over” mirrors a statement made in March 2018 by former President Mauricio Macri during a session with Congress. The month following that statement, a crisis in the exchange rate emerged, accompanied by a notable acceleration in inflation. At that time, the peso was valued at approximately 20 pesos per US dollar; currently, this figure has escalated to nearly 1,450 pesos per greenback.